Broadcast Music, Inc. v. Columbia Broadcasting System, Inc.

1979-04-17

Headline: Blanket music licensing by performing-rights groups is not automatically illegal; the Court reversed the appeals court and sent the issue back for a detailed inquiry affecting TV networks, broadcasters, and songwriters.

Holding: The Court held that blanket licenses sold by performing-rights organizations to television networks are not automatically illegal price fixing and reversed the appeals court, sending the case back for a detailed inquiry into competitive effects.

Real World Impact:

Blanket licenses no longer treated as automatically illegal price fixing.
Networks and broadcasters may face detailed antitrust hearings about licensing fees.
Copyright groups can still offer collective blanket deals but must show competitive benefits.

Topics: music licensing, antitrust, broadcasting, blanket licenses, performing rights

Summary

Background

A national television network, CBS, sued the performing-rights groups ASCAP and BMI and their members. CBS said the groups sell "blanket" licenses — one fee allowing use of any member songs — and argued these collective fees were illegal price fixing and other antitrust violations. The District Court rejected most claims after an eight-week trial, but the Court of Appeals found the blanket license was per se price fixing.

Reasoning

The Supreme Court examined whether blanket licenses are so plainly anticompetitive that they should be condemned automatically. It noted the long history of consent decrees limiting ASCAP, Department of Justice involvement, and that Congress has used blanket-license mechanisms in some laws. The Court said blanket licenses can create efficiencies by lowering transaction, monitoring, and enforcement costs and can be a distinct marketable product. Because the practice’s competitive effects were not clear on its face, the Court refused to treat blanket licensing as automatically illegal and sent the case back for a detailed inquiry into competitive effects.

Real world impact

The decision means blanket licenses will not be struck down automatically as price fixing. Broadcasters, songwriters, and performing-rights organizations will face further antitrust review under a fact-focused test. The consent decrees and the Government’s role remain important to how courts evaluate licensing conduct, and final outcomes could still limit some practices after full analysis.

Dissents or concurrances

Justice Stevens dissented, arguing the record shows the blanket-only licensing policy harmed competition and that a full rule-of-reason review would find the practice unlawful; he would have affirmed the Court of Appeals.